Monday, August 2, 2004

U.S. farmers say they will have to wait at least until next year before they know how significantly government support for agriculture would be changed under an emerging global trade agreement.

“The final numbers … remain to be worked out. Absent more specificity, we can’t tell how it will affect our programs,” said Rosemarie Watkins, trade policy director at the American Farm Bureau Federation, the nation’s largest agriculture association.

U.S. legislators, though, already are taking sides after the World Trade Organization’s 147 members over the weekend reached a broad agreement on new rules governing manufacturing, agriculture and services. Lower trade barriers are meant to boost economies by easing global commerce.

The agreement is the halfway point and a major step forward for negotiations, but still leaves crucial details to be determined next year or into 2006.

Agricultural trade has proved to be the most difficult topic, with developing countries demanding that the United States, European Union, Japan and other wealthy nations scale back popular programs that support farmers but also can distort world markets.

All rich countries combined paid $257 billion in support to their farmers, with the 25-nation European Union doling out the most at $121.4 billion, the Organization for Economic Cooperation and Development said.

Support to U.S. producers in 2003 was $38.9 billion, the OECD said.

Those funds would be constrained or at least redirected under the framework agreement Sunday, though how much is uncertain.

“It’s a carefully negotiated fudge that can be interpreted in several ways, and it could mean real reform of agricultural subsidies and trade policy, and it could mean very little,” said Gawain Kripke, policy adviser for Oxfam, a group fighting poverty.

Money could be shifted from, for example, production-linked subsidies that distort trade to subsidies that help preserve the environment regardless of production, which only minimally affect markets.

Congress ultimately will determine how to distribute taxpayer dollars to U.S. farmers, and whether to adopt a new WTO agreement.

Republicans and Democrats quickly squared off to praise or denounce the new framework.

The administration has offered to cut subsidies, but only if other countries open their markets to U.S. products, creating new opportunities for exports.

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